KeyBanc survey: AI-native software grows faster but loses more money

Nov 13, 2026
Companies selling AI as their main product posted 34% median ARR growth but a negative 12% EBITDA margin.

Software companies that sell AI as their main product grew annual recurring revenue by a median 34% in 2025, against 22% for companies embedding AI in broader products, but reported a median EBITDA margin of minus 12% against minus 1%, according to KeyBanc Capital Markets' 17th annual AI x Software Benchmark, the bank announced.

AI-driven ARR is projected to grow 128% in 2026 but will still be only 12% of total ARR. 44% of respondents say AI spending is over budget this year, mostly because of higher token use, and companies spending more than 5% of revenue on AI had a 66% median gross margin against 78% for those spending under 2%.

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